MAI Systems Has $5.9-Million Loss for Quarter
Despite a corporate restructuring that cut hundreds of jobs, the financially hurting computer reseller MAI Systems Corp. reported Thursday a $5.9-million loss for the second quarter ended March 31.
The loss compared to net income of $2.1 million for the same period a year earlier. The company attributed the loss to higher operating expenses, lower revenues and competitive pricing in the technologically obsolete minicomputer industry.
During the quarter the company eliminated 400 jobs after it accelerated its shift from a computer manufacturer to a value-added reseller, or a seller of company software packaged with computers made by other manufacturers.
Since then, the company eliminated 400 additional jobs, leaving the firm with about 2,600 employees. Fred D. Anderson Jr., president and chief operating officer, was also replaced this month in a shake-up.
Anderson was replaced by Peter S. Anderson, a former Western Union Corp. executive who is a longtime business associate of Robert J. Amman, who became MAI’s vice chairman in February. Amman is an associate of MAI’s majority shareholder, New York financier Bennett S. LeBow.
Michael Veuve, vice president for finance and administration, said the company suffered somewhat from a continuing downturn in the minicomputer business and a high value for the U.S. dollar against European currencies. International sales account for about 60% of MAI’s business.
Revenues for the quarter fell 4% to $91.3 million from $95 million a year earlier. The company said sales were hurt by a soft minicomputer market, sale of the company’s Australian subsidiary last year and a dip in service fees that resulted from sales of new computer models that offer extended warranties for customers.
The company attributed its eroding profit to competitive pricing in the industry, discounting of older MAI computers being phased out, higher inventory provisions for trade-in equipment and a higher proportion of low-margin software sales instead of high-margin hardware sales.
MAI also saw higher expenses at its Computerized Lodging Systems business, which sells computers to the hotel industry.
